Negotiating a partnership, commercial lease, settlement or other type of agreement in California can be a tedious process. However, as difficult as these negotiations are, they can become even more challenging when the parties attempt to memorialize the agreement in writing – particularly if one party attempts to employ bad faith tactics. A recent article from the New York Law Journal describes how such efforts can sabotage good faith negotiations, so it is helpful to understand what these tactics are. Below are some examples of what these might look like.
Negotiating without an interest in reaching an agreement
In these situations, false negotiators are typically only interested in collecting information about the other party. There is no real intention of entering into an agreement. In these cases, be wary of excessive delays, refusal to answer questions directly and dealing with individuals who are not authorized to make decisions.
If parties have reached an agreement on material terms, they should not change those terms or try to leverage those terms for additional concessions without good reason or fair compensation.
Hiding significant material facts
This is not only in bad faith, but possibly fraudulent, depending on what facts are concealed. To protect against this possibility, your attorney will typically include a provision in the written agreement in which the parties warranty their representations and sets forth a remedy to the aggrieved party in the event any such material representations are false.
How to deal with bad faith negotiations
Heading into any business negotiation warrants support and careful preparations. Whether you trust the other party or not, you will want to be cautious and protect yourself. Make sure you have a competent attorney represent you and be wary of bad faith tactics. If you’re negotiating a deal that you have no obligation to complete – such as a partnership agreement – and you are confronted with these types of tactics, you may wish to take it as an omen to come and withdraw from the deal before it’s too late.